Riunione Adriatica di Sicurtà (RAS), the second-largest insurance company in Italy, was founded on May 9, 1838, in Trieste when its parent company, Adriàtico Banco d’Assicurazione, decided that expansion could no longer be delayed.

Trieste was then part of the Austro-Hungarian Empire, and, profiting in part from the commercial decline of Venice, was undergoing a period of unprecedented economic and financial strength. The population, which was to keep climbing, had risen to 53,000. As a major seaport, Trieste quickly became a major center for the budding European insurance industry. The city’s first insurance company, the Compagnia di Assicurazioni, dates back to 1766. In 1826, when the Adriàtico Banco was set up, more than 20 insurance companies were already in operation.

The Adriatico Banco was set up to deal in maritime insurance. Its directors and board members included Ambrogio Ralli, the descendant of an illustrious Greek family from Chios; Danilo Dutilh, a trader and sugar producer who was of Dutch origin; Alessio Paris, a fabrics trader and friend of the poet George Byron, who was active in the Panhellenic movement; and Angelo Giannichesi (Angelos Giannikesis), a Greek from the island of Xanthi, who was to become a major financial backer of the Greek revolution. In 1829 the company adopted a new charter, and diversified into both river-transportation insurance and credit insurance. The latter innovation, largely a response to the needs of the rapidly expanding commercial sector, made the Banco the first company in Italy, and one of the first in continental Europe, to provide this kind of insurance on a regular basis.

Less than a decade later, further innovation was called for. Some board members already had pushed unsuccessfully for operations to be extended to other cities and had warned of the threat of competition from abroad. The response, when it finally came, was Riunione Adriatica di Sicurtà (RAS). Established to specialize in fire insurance and cargo-transport insurance, the new company, with registered capital set at an impressive one and a half million florins, was designed specifically to satisfy the desire for internationalization. The introduction to the new company’s charter stated that: “While fire insurance has been a haven for many, it has not exactly been unprofitable for those originating the policies and we may observe that in all those countries where such systems operate, insurance companies have always made considerable profits in spite of a great number of accidents of huge proportions. This double advantage has given the Adriatico Banco, which has been operating in Trieste for twelve years and specializing in maritime and credit insurance, pause for thought. It has thus been decided to set up a new company with its own sizeable and independent capital, to deal in fire insurance as well as insurance for goods in transit. In this way it is able to extend to the whole of the Austrian kingdom, and elsewhere, the services that it has always been proud to offer in Trieste.”

Almost immediately branch agencies or representative offices were opened in Athens; Budapest; Graz, Austria; Leghorn, Lugano, and Milan, Italy; Berlin; Kotor, Yugoslavia; Lvov, Russia; and Prague. In 1840, operations were expanded to include reinsurance, and in 1846, livestock coverage. By 1844, further agencies had been opened in Cologne; Gdansk, Poland; Florence; Hamburg; Nuremberg; Szczecin, Poland; and Warsaw. At this time the company initiated a long-standing policy of basing expansion on the establishment of autonomously run agencies headed by socially and financially prominent individuals who would then be flanked by company insurance experts or secretaries. Thus, as early as 1838, a Venice agency was established that was designed to function as a center of expansion into the territory of the Lombard-Venetian Kingdom.

The list of RAS founders includes Giannichesi, who was to be managing director for more than 20 years; the German Baron Herman Lutteroth; Stamaty Zizinia, a Greek noble; Trieste merchant Vita Salem, and Gustavo Adolfo Ulrich of Saxony. Whereas the heads of the Adriàtico Banco were predominantly of Greek Orthodox backgrounds, RAS’s shareholders and board of directors consisted of Middle-Europeans: Slavs, Germans, and Austro-Hungarians. Nevertheless, Greek influence remained strong and there is little doubt that the support of Giannichesi and other RAS shareholders during the Greek independence movement was to be instrumental in the Greek government’s 1842 decision to grant RAS a ten-year monopoly on fire insurance in the new kingdom. This was to have negative financial repercussions, however, since at the time of the disastrous 1917 fire in Thessaloniki, RAS policies amounted to several million gold francs.

The new company’s charter included safeguards against possible takeovers. Capital had been distributed in 1,500 shares of 1,000 florins each. Share trading needed the approval of the directorate. Each director-administrator was required to own 30 shares, and only shareholders could become agents.

Political events disrupted RAS operations. The revolutions of 1848 interfered with trade and manufacturing. However, as
soon as peace was restored to the continent, innovation continued. In 1853, RAS introduced insurance against hailstorms in Bohemia and later extended it to the Lombard-Venetian Kingdom. A general agency for transport insurance was set up in Marseilles. After RAS was granted permission by Victor Emmanuel II of Sardinia—later to become king of a united Italy—to extend its operations to his realm, which included Sardinia, Piedmont, and Genoa, an agency was opened for the first time in Genoa.

The following year the company opened its first life insurance department. Affected by the world economic crisis, business was slow. Between 1854 and 1857, 508 policies had been issued, compared with 12,550 between 1857 and 1860. In 1856, to cover its life insurance annuities, the company made its first real estate acquisition, the Hotel de la Ville in Milan, which it still owns. Because of the world recession of 1857, in 1858 no dividends were distributed. However, business was to improve. A publication distributed during the Vienna World Exposition in 1873 showed that of 33 insurance companies operating on Austro-Hungarian soil, RAS carne second in terms of insured values, premiums collected, and damages paid.

In 1863, Angelo Giannichesi died and was succeeded by Alessandro de Dañinos, a well-respected member of the community of Leghorn who since 1838 had held the post of secretary-general. Greater changes were to follow. After the second war of independence against Austria in 1859, the kingdom of Sardinia began to expand gradually and RAS followed suit. In 1862 an act of incorporation led to the takeover of the Adriàtico Banco by RAS. Headquarters were moved to Florence when the national capital for the new kingdom of Italy was established there in 1865. Three years later authorization was obtained from the pope for RAS to operate in the Papal States. In 1871, one year after the fall of Rome and the completion of Italian unification, the company’s head office for the kingdom of Italy was moved to Rome.

In July 1878, when RAS celebrated its 40th anniversary, the situation was extremely favorable. Premiums, which had reached 120,000 florins in the first year of existence, had soared to over 9 million florins. The company’s network consisted of 12 general agencies, 176 principal agencies, and 4,061 sub-agencies. There were also three agencies, based in Brussels, London, and St. Petersburg, that specialized in reinsurance. The company employed 296 people. The degree of activity outside Italy is illustrated by the fact that in 1881 RAS’s general agency in Budapest celebrated the issue of its one-millionth fire policy on Hungarian territory.

Operations in Italy were also expanding, and when in 1898 it became compulsory for many industries to hold accident insurance, RAS, which was already handling this type of insurance through a specialized Austrian affiliate—Interun-fall—set up a new Italian company, L’Assicuratrice Italiana, to deal in accident and public liabiliity insurance. A similar Paris-based company, La Protectrice, was to be established in 1911.

One of the new subsidiary’s first clients was Luigi Amadeo of Savoy, Duke of the Abruzzi, who in 1899 took out accident insurance for his expedition to the North Pole with Captain Umberto Cagni. Towards the end of the century, RAS began selling plate glass and, in 1900, theft insurance.

Starting in 1872, operations in Italy had been organized into three separate geographical areas: Milan, Venice, and Rome. In 1908, however, a central directorate for Italy was set up in Milan, and a new price schedule for life insurance policies was devised. A few years later, work began on the company’s new headquarters in Trieste, opened in 1914, in what today is called Piazza della Repubblica. It was also decided to expand operations into the Iberian peninsula, with Barcelona chosen as a site for the head office. Four agencies were opened in the newly created state of Albania.

World War I left Europe in the midst of incalculable destruction, and RAS, which was active in almost all the combatant countries, found itself facing hard times. Communications between headquarters and many branch offices had been interrupted, and insurance operations were frequently disrupted by military occupation, currency devaluation, and personnel shortages. Irredentist movements in the Trieste area created other tensions, and after the Austrian police described the general directorate as “a nest of irredentists,” headquarters were forcibly transferred to Vienna. Still incorporated under Austrian law—Trieste became Italian in 1918 at the close of World War I—in 1916 the Italian branches of RAS briefly risked sequestration under an Italian decree calling for the confiscation of firms belonging to enemy nations. This decree was revoked in 1917. Although the world conflict was still raging, RAS took the first steps to reestablish the Italian reinsurance market, setting up La Riassicuratrice, a subsidiary which was to be merged later with L’Assicuratrice Italiana. At the close of the war, the company rewrote its charter and converted its registered capital into Italian lire. The new charter created the office of president. The first person to hold this position was Scipione de Sandrinelli, the former mayor of Trieste. Upon his death in 1922 he was succeeded by Eugenio Brunner, who was to occupy the post until 1933.

RAS’s foreign expansion continued. In 1928, representative offices were opened in China, India, and Morocco. In 1928, the kingdom of Romania, which after the war had absorbed territories such as Transylvania and Banat where RAS had long-standing operations, passed an official decree authorizing RAS activity. The following year, the company crossed the Atlantic Ocean for the first time, setting up a directorate in Brazil.

A new breakthrough in the insurance field came when the company issued its tourist’s policy in 1934, possibly the first global insurance ever promoted on the Italian market. It insured the policyholder against all risks—accident, loss of tickets, loss or theft of baggage—involved in traveling to and residing at a holiday destination. It also insured against damages to the insured’s home in his absence.

The darkening of the European political scene in the late 1930s had a direct effect on RAS; its president, Amoldo Frigessi, who was of Jewish descent, was forced to resign because of the racial laws adopted by the Fascist regime. He was replaced by Fulvio de Suvich, a company director who had served as under secretary of state at the Foreign Ministry but who was at odds with dictator Benito Mussolini over relations with Nazi Germany. Frigessi, like his father, had spent his entire working life at RAS, and was credited with much of the impetus behind the company’s continuing international expansion. By the time the war broke out, RAS was operating directly, or through affiliates, in 26 other countries.
The company was at the head of a group consisting of 16 subsidiaries, 10 of which were based outside Italy. There were 16 directorates, 74 general agencies, and 459 principal agencies in Italy and abroad. In 1938, total premiums from all branches amounted to L538 million.

Frigessi went into hiding but refused to leave Italy. When Rome was liberated in 1944 he returned to RAS, coordinating operations in central and southern Italy. In 1946 he returned to Trieste, first as managing director and then, in 1947, as president. Until his death in 1950, Frigessi’s efforts were directed largely at expansion in North America and South America to make up for the vast loss of business in eastern Europe.

At the close of World War II, Italy was in a state of near collapse. The economy was in tatters and, not surprisingly, insurance activity had ground to a virtual halt. The value of premiums had plunged, and because of Italy’s enemy status many of the company’s overseas assets had been seized and its operating licenses revoked. The 1947 Peace Treaty, for example, called for the surrender of all Italian property in Hungary, Romania, and Bulgaria to the Soviet Union as a form of war compensation. Not long after, the insurance market was nationalized in Czechoslovakia, RAS’s second-largest market. The company was also forced to abandon operations in Albania, Poland, and Yugoslavia. The withdrawal from eastern Europe cost the company almost a third of its total business. At the same time, the establishment of the free territory of Trieste—which was returned to Italy in 1954—led to the relocation of company headquarters to Milan.

Reestablishing the insurance business in the postwar period was to prove a slow and painstaking process. Deteriorating political conditions in various countries—Egypt, Libya, South Africa—were to curtail more of RAS’s international activities. At home, there was a compelling need to deal with runaway inflation and widespread unemployment. There were changes in management and ownership. Enrico Marchesano, a highly respected Banca Commerciale official who joined RAS in 1934, and, with the exception of a two-year period in which he served as head of the Institute for Industrial Re-constructon, remained with RAS for the rest of his career, became president and managing director. In 1948, Piero Sacerdoti, who had spent most of his career first with L’Assicuratrice and then with La Protectrice, was made director-general of RAS. Sacerdoti, who is credited with successful attempts to revitalize the company, initiated studies on public liability regarding damages caused by nuclear energy. Between 1949 and 1971, under the leadership of Mario Pontremoli, the RAS subsidiary L’Assicuratrice Italiana increased premiums to L90 billion, equaling those of the parent company. The establishment of subsidiaries abroad continued, with the birth of Consolidated Insurances of Australia in 1960 marking RAS’s extension to that continent.

In Italy during this period, innovations in the insurance industry included that of linking insurance to financial investment and planning. In 1954 RAS joined COFINA—over which it was to acquire total control in 1972—a company which sought to encourage stock purchases by issuing insurance policies that would pay off remaining stock-purchase installments in the event of a policyholder’s death. In the same year, the company inaugurated the Pluvius policy, offering protection against rainy weather to vacationers. Group policies were launched in 1958. In 1960, RAS was the first to offer a banking insurance plan by offering depositors at CARIPLO, the large Milan bank, policies providing for a doubled bank account in the event of death. In 1963 it was the first Italian insurance company to sell policies by mail. Three years later, Compagnia di Genova, another RAS subsidiary, launched a nautical policy for leisure craft, the first in Italy.

By now prosperity had returned to Italy and the insurance market was expanding. The administration of President Ettore Lolli, from 1967 to 1983, oversaw the creation of DIVAL, a financial-services company that began by trading shares in Three R, a Luxembourg-based unit trust set up by RAS together with the IRIS Holding Company owned by the N.M. Rothschild bank and the Rockefeller family. In 1974 a new RAS subsidiary, Continentale Allgemeine, was set up in Zurich. In 1980 RAS incorporated L’Assicuratrice Italiana, and in 1983, two days after the publication of the law legalizing Italian unit trusts, RAS launched the first such Italian fund, GESTIRAS.

After World War II there had been changes in the company’s shareholding structure. During the interwar period, RAS shareholdings had been characterized by a broadly diffused structure, but some 20 families with long-standing RAS connections—such as the Brunner, Economo, Frigessi, Ralli, Ravano, Pavia, and Ottolenghi families—for the most part of Triestino, Venetian, or Lombard origins, enjoyed particular influence. After the war, several new shareholders—including, during the 1950s, the Holy See—appeared on the scene. After 1952, Italmobiliare, the holding company of industrialist Carlo Pesenti, gradually became the principal stockholder.

Pesenti died in September 1984, and soon after it was announced that Allianz, the Munich-based European insurance group, would be buying Pesenti’s 38% share along with other holdings purchased from Toro Assicurazioni and Saes, a subsidiary of IFI, the Agnelli family’s holding company. As agreed, in 1987 Allianz’s share rose to 51.51%. The other major stockholders were Imigest Fondo Imicapital with 2.01%, the Banca d’Italia with 1.09%, Fonditalia Management with 0.6%, and Crédito Italiano with 0.49%. The remainder of the stock was mostly on the market.

Under the direction of Umberto Zanni, appointed president in 1986, the company has flourished, although there have been problems. The 1989 balance sheet, the 151st in the company’s history, showed RAS’s gross premiums amounting to L2.52 trillion—about US$2 billion—while total premiums for the entire insurance group, which includes 11 Italian and 18 foreign companies, amounted to over L5.43 trillion. RAS also holds a controlling interest in an additional 37 companies, 18 in the field of financial management or investment and 19 agriculture, real estate, or services. In the trust division, assets managed by the group amounted to almost L7 trillion.

Although profits were boosted by real estate sales, 1989 was a difficult year. Like most Italian insurance companies, RAS has been faced with mounting accident claims—largely automobile—which in 1989 rose 20% to 779,541. Substantial underwriting deficits exist in many divisions. In particular, there were significant losses in the automobile division which Chairman Zanni says were structural and likely to increase unless third-party motor insurance rates, which are set by the
government, are allowed to rise. Much of the company’s future prosperity will also depend on developments in the financial sector. Although the situation is expected to improve, redemptions of investment funds in 1989 still exceeded subscriptions. Confusion regarding rules and regulations in the life insurance sector had led to a fall-off in new business.

The link-up with Allianz has been of enormous importance to RAS and is likely to be increasingly significant. In autumn 1990, the first branch of a new bank, RASBANK, in which RAS has a 65% stake, Allianz a 25% holding, and Hypobaruk, Munich, a 10% stake, opened. In spring 1990, RAS participated—with a 6% share—in Allianz’s 64.5% takeover of Navigation Mixte, one of France’s top five insurance companies, a move which gives the group control over four French insurance companies with premiums equal to about FFrl0 billion. Important joint ventures are also under way in Spain, where RAS and Allianz joined Banco Popolar in forming Europensiones and Eurovida. From Allianz’s point of view, the link-up has also been a success. In an interview that appeared in Corriere dell Sera on June 20, 1990, Allianz’s chairman, Wolfgang Schieren, said that Allianz’s position in Italy is now stronger than in any country other than Germany. “We have a market share of 10%; almost 35% of Allianz’s foreign activity... and 14% of worldwide premiums come from Italy.”

RAS is now convinced that the main challenge for the future will come from the completion of the single European market. Company directors, however, have been outspoken in urging the Italian government to develop a clear policy regarding the insurance industry that would permit it to prepare properly for the tough competition that is expected to come from its more developed European rivals.

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